September and Q3 2024 Shareholder Update

💡 Sent to shareholders on November 1, 2024

Hi there,

Read on for Buffer’s September 2024 results and key updates, as well as a Q3 2024 reflection. Hit reply if any comments or questions come to mind.

Notes:

• Q3 marked a positive shift in momentum, with our highest signup levels in four years, our strongest MRR since 2022, and a steady trend toward consistent profitability.
• We're glad to see an increase in Monthly Active Users for September, as this continues to be our key area of opportunity for growth and a metric I have my eye on as unless we are successful in growing MAU, we may be headed for an overall growth plateau.
• September is our sixth consecutive month of profitability. This progress has reduced our year-to-date net loss to $77,021. Given our current trajectory, we anticipate a strong Q4, positioning us for an overall profit for 2024.
• September saw our highest number of paid signups, driven by the dedicated efforts of our paid marketing team. We’ve made a significant investment in this area in 2024 and we’re continuing to see strong momentum.

Note-worthy updates and reflections

Achieving $19M in ARR once again

In September, we crossed $19M in ARR at Buffer… for the second time. It's been a journey, to say the least. We first crossed $19M in ARR in September 2018. It's hard to believe that's six years ago.

To be declining for multiple years is demoralizing and exhausting. But I always planned to build a long-term business and was determined to lead us back to thriving, so I remained optimistic despite the fact it took some searching to find the path to new growth. The first time we crossed $19M, the writing was on the wall for our looming decline. Pace of product improvement and innovation had stalled; we were debilitated by tech debt we didn't yet know how to manage. We succumbed to squeezing revenue out of existing customers, and were already seeing a steep decline in new paying customers.

This time around, we are moving faster and more boldly than we have in years, and we've re-centered ourselves around growing by serving more customers and continually adding real value, rather than through price increases and short-term growth hacks. There's no doubt we will run into challenging cycles again in our future. I'm confident we'll find our way through those too. To me, that's a natural part of building a long-term business. From here – onwards to $20M, again.

Schedule threaded posts to Mastodon

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Q3 2024 Reflection

We ended Q3 2024 with $1,602,052 in MRR or $19,224,628 in ARR. This represents 3.46% growth from Q2, which is our strongest quarterly growth in almost 5 years. We also grew paying customers by 2.89% to 57,666, our strongest growth in over 6 years. We continued our trend from Q2 of profitability in each month of Q3, and achieved a net income of $125,289 for the quarter.

Segmenting out Legacy and New Buffer customers, we can understand the numbers and trajectory in higher definition. New Buffer now represents 83.2% of total MRR, and 80.2% of paying customers. We saw an MRR/ARR growth rate for the New Buffer segment of 7.82% for Q3.

The delta between our 7.82% growth rate for New Buffer vs our overall growth rate of 3.46% shows that we have a strong foundation of growth in our current and majority customer segment. In Q3 we added $83,427 in net MRR growth for New Buffer, with $12,861 (15.4%) of this coming from Legacy customers migrating over to our New Buffer plans, while Legacy Buffer as a segment declined by $30,259 in net MRR. This indicates that we will continue to see strong overall growth rates going forward.

The Legacy segment continues to decline as we are not adding any new customers to it, and it has a natural churn rate. In Q3 the Legacy segment declined by 13.81% to $268,974 in MRR or $3,227,693 in ARR. We are happily tracking the decline without aggressively forcing customers to migrate to New Buffer plans. Eventually we will aim to get this segment to zero, which will enable simplicity in our product, architecture and customer service.

I predicted in my Q2 update that Q3 would be the quarter we see an overall increase in the number of paying customers once again. We are celebrating achieving this, and looking ahead to how we can continue to achieve strong growth in both the number of paying customers and MRR/ARR so that we can see many more strong growth quarters ahead. I expect we will see a strong Q4 despite the usual seasonal dip in usage of our product during the holidays, thanks to a continued strong growth rate of New Buffer and the lessening pull down effect of Legacy as the segment declines.

Thanks for your continued support!

Joel, Founder CEO